Non-Current Assets
<ul><li>Resources held by the business which will not be converted to cash within the one accounting period. </li></ul><ul...
Factors which limit life of a NCA <ul><li>Wear and tear </li></ul><ul><li>Technical obsolescence </li></ul><ul><li>Commerc...
Measuring the Cost of a NCA <ul><li>2 associated costs when purchasing NCA </li></ul><ul><ul><li>Capital expenditure </li>...
<ul><li>Capital expenditure </li></ul><ul><ul><li>any significant cost that increases the value of a NCA. </li></ul></ul><...
Accounting for Capital Expenditure <ul><li>Bought for cash motor vehicle $55,000 made modifications 5,500 (GJ) </li></ul><...
Revenue Expenditure <ul><li>Registration and insurance of motor vehicle $3,300 was paid in cash (CPJ) </li></ul><ul><li>Re...
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Non current assets theory

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Non current assets theory

  1. 1. Non-Current Assets
  2. 2. <ul><li>Resources held by the business which will not be converted to cash within the one accounting period. </li></ul><ul><li>eg equipment, buildings, machinery, plant. </li></ul><ul><li>3 types of NCA </li></ul><ul><ul><li>Property plant and equipment </li></ul></ul><ul><ul><li>Investment </li></ul></ul><ul><ul><li>Intangible </li></ul></ul>
  3. 3. Factors which limit life of a NCA <ul><li>Wear and tear </li></ul><ul><li>Technical obsolescence </li></ul><ul><li>Commercial obsolescence </li></ul>
  4. 4. Measuring the Cost of a NCA <ul><li>2 associated costs when purchasing NCA </li></ul><ul><ul><li>Capital expenditure </li></ul></ul><ul><ul><li>Revenue expenditure </li></ul></ul>
  5. 5. <ul><li>Capital expenditure </li></ul><ul><ul><li>any significant cost that increases the value of a NCA. </li></ul></ul><ul><li>Revenue expenditure </li></ul><ul><ul><li>is any cost relating to a NCA that is incurred to maintain but not to extend, its useful life. </li></ul></ul><ul><li>See table page 340 </li></ul>
  6. 6. Accounting for Capital Expenditure <ul><li>Bought for cash motor vehicle $55,000 made modifications 5,500 (GJ) </li></ul><ul><li>Motor Vehicle Dr $50,000 </li></ul><ul><li>Motor Vehicle Dr $ 5,000 </li></ul><ul><li>GST Clearing Dr $5,500 </li></ul><ul><li>Bank Cr $60,500 </li></ul>
  7. 7. Revenue Expenditure <ul><li>Registration and insurance of motor vehicle $3,300 was paid in cash (CPJ) </li></ul><ul><li>Registration & Insurance of </li></ul><ul><li>Motor Vehicle Dr 3,000 </li></ul><ul><li>GST Clearing Dr 300 </li></ul><ul><li>Bank Cr 3,300 </li></ul>

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